Whether you love Toyota's hybrids or
don't care for them, its hard to fault Toyota's strategy from a
business standpoint. Demand is at a record
high and the manufacturer is making
profit on-level with traditional sedan designs, thanks to various
cost cuts. And with August sales in the books, the automaker
has announced that it has reached a significant milestone: selling
its two-millionth
hybrid vehicle.

Toyota was the first to create a
mass-production hybrid, when it launched the Prius in 1997.
Since then it has seen strong demand for that vehicle as it has
evolved over three generations. Meanwhile, Toyota has fleshed
out its hybrid offerings with Toyota Camry, Toyota Highlander, Lexus
GS 450h, Lexus RX 450h, and LS 600h hybrids. More hybrids from
Toyota and Lexus are also in the works.

Later this year Toyota
will launch the Lexus
HS 250h, a new luxury hybrid vehicle. The vehicle will join
13 hybrid vehicles currently in the company's lineup (though many of
these are Japan-only models). Toyota continues to advance on
its plan to by 2020 launch a hybrid version of every vehicle in its
lineup, as well as continuing to offer hybrid-only offerings like the
Prius.

On May 31, 2007 Toyota topped one million hybrids
sold. Toyota estimates that since 1997 its hybrids have reduced
CO2 emissions by 11 million tons (based on a comparison of fuel
economy of sedans of similar size and class).

In the next
decade, Toyota hopes to be selling 1 million hybrid vehicles a
year.

Toyota does face growing competition in the market.
Rival Japanese automaker Nissan will be launching an pure electric
vehicle, the Leaf EV in 2011. Both Nissan and Honda are also
expanding their hybrid lineups, with Honda's Insight posting modest
sales, despite lukewarm reviews. German automakers are also
pushing ahead with clean
diesel and hybrid offerings and the U.S. automakers all have
growing hybrid lineups, as well plans for electric vehicles.

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Just curious, I haven't searched for it yet, but does anyone know how many hybrids the American companies have sold? I'd be surprised if it was 10% of the total from Toyota. I'm glad Ford didn't need bail-out cash, but generally this is why the American Auto industry is flailing and surviving on public funds. It takes them forever to do anything new... I think it's a top down problem. The management sticks to old playbooks, is afraid to innovate, they never retool in time, and the union contract doesn't let them shift a workforce to effectively work with market demand.

I'd rather see American companies succeed over foreign makers, but I can easily see why Toyota was positioned for success. Maybe they didn't predict hybrids taking-off like they have, but they were still had very good footing to respond. Meanwhile we have GM preparing to release the Volt. If we're still in a recession upon release they'll be in double-trouble. No one would buy a $40,000 electric car in a down economy. Even if the economy fully recovers by then, I think their chances are still spotty at best. The problem being, most people that pay $40,000 for a car aren't concerned about fuel costs anyway. I'm sure there are some environmentalists who would be, but almost all the traditional sedans in that price-range have monster-sized engines since affluent buyers seem to value power over savings.

I still think Ford has the right idea about their hybrid line, but they really need to bring it to the Taurus and other vehicles.

The odd thing is that the American companies seem to be floundering in the middle. The European makers have aggressively embraced diesel, Japanese, hybrids, but the US? No idea what to do. It seems like everything they do is an experiment because they're too afraid to try something new and embrace it.

That's what a completely free economy gets you. Let them do whatever they want and they won't do a damn thing in terms of progress. Profit... now that is a different story. The reason the Europeans and Japanese have diesels and hybrids and generally 35%-50% better fuel economy across the board is because their government forced them to do so. These companies didn't one day just decide to be more mindful of their environment.

It kills me that people still think that government should butt out of business. It is true that the government shouldn't run the day to day dealings of our private sector but look what happens when they don't do anything. The banking sector had a free for all....even after the bail out they were demanding bonuses as they earned them. The US auto industry gave the economy a big middle finger until they saw companies like Toyota making money being green, and, really, until the bottom fell out. The oil companies, when gas was $5/gallon, stated that they have not increased production in the past 5 years, nor will they increase production in the next 10 years as to keep oil prices high. This is what they stated when they were raking in tens of billions in profit per quarter. Basically they said they knew that the average American was hurting from gas prices but f everyone except their profit margin.

Companies won't do the right thing unless there is an incentive. Good luck holding your breath waiting for these companies to do the right thing on their own.

quote: Companies won't do the right thing unless there is an incentive.

Unless it's part of the companies policy or way of doing business, doing the "right" thing isn't a requirement. The consumer has the power to simply not use those companies that don't fit our requirements. Unsuccessful companies either change or go out of business. That's how it's supposed to be done. The problem isn't business, it's the consumer. We (the royal we) don't really care about what these companies do until we've already been bent over the table. Be proactive and you won't get burnt.

Let's be real for a minute, we all know a companies primary purpose is to make a profit. Hell, publicly traded companies are required by LAW to make an effort to make a profit. The benefit of this is the consumer (us) gets a product or service from these companies. Whether it's the Mom and Pop shop on the corner or the multi-billion dollar, multi-thousand employee behemoth, they don't do what they do for free or because they just want to help the community. They do it for money. I know a few Mom and Pop shops currently that are afraid of cap and trade because they don't know if they'll be able to afford to stay in business. If these businesses were simply doing it for the community, they wouldn't be concerned about things like this, they would happily comply but that's not how it works.

quote: Companies won't do the right thing unless there is an incentive.

This is inaccurate and your points contradict themselves. You're saying the US doesn't have strict regulations... But the problem is that Toyota sold most of their hybrids in the US, where we don't have strict regulations.

Thus, they choose to develop the technology, for *our* market without a government requirement to do so.

The free market works fine. People that want fuel efficient cars can buy Kias, Insights, etc. If someone wants a high performance car, they can do that too. If someone wants to pay $4/gallon for gas, in a fuel inefficient car, I have absolutely no problem letting them doing so. Generally speaking though, hybrids are too expensive for the benefit given. Diesel is a much better technology, but we need better refined fuels. The problem being is that here in the US, if you increase diesel refining costs (by making it cleaner) the Teamsters protest since it impacts all their truck drivers. I don't know if the EU has this problem since I thought trains were more common for freight traffic. Plus I know the UK has very stringent laws on truck pollution, so much that all trucks have a governor that don't let them go beyond 50, or 55 or similar. You couldn't get away with that here because calls would be made to congress telling them to drop the bill in exchange for their generous campaign contributions. And I'm not singling out the unions, both sides do it. But our dirty diesel fuel is mostly due to our freight traffic.

If you knew anything about business you would know that Toyota would never have made hybrids unless they thought they would take off sooner or later. The American car makers just did what they needed to get a short term bottom line. Forget the future.

Thanks for a pointless and rude response to my question that wasn't insulting to anyone.

Yes, I know about business and yes I realized Toyota made the vehicles because they expected to make a profit. I'm just not sure if Toyota expected them to be as entirely successful as they've been. However they were ready enough to push-them-down the model line and get them out to consumers.

I also don't think it's fair to say the American companies did what was right for the short term... They could have been caught entirely unaware. Car development is inherently long-term (multiple years per new model), so nothing is short-term. It could be fair to say the American companies just have chronic bad judgment, but I wouldn't automatically say they are short-term thinkers.

I know I'm replying to myself -- but case in point: Ford canceled the Taurus. It was just the most popular car they ever sold... This wasn't a short-term thing, just that the CEO was a twit and it eventually cost him his job. The new CEO promptly came in and brought the Taurus back.

Another thing, I just think the American companies have no idea what consumers want... Ever. They wait for someone else to build something, realize there is demand, and then take years to design their own copy. I wouldn't call this short-term, they just have no clue how to read consumer desire.

You take one business quarter as definitive proof? And an article from March? Especially when they were asking for something like 5-10% of what GM got, and GM is actually a smaller company and has gone back to the government more than once?

I don't like defending foreign companies, but the article you cited clearly mentions they have adequate reserves. They were trying to refinance long-term debt which matures this year, and the frozen capital markets caused problems for their long-term cash strategy. GM wasn't *only* trying to cover mature debt, they were bleeding cash and couldn't even handle their operating capital. From an economic perspective the two situations aren't even similar (Toyota went to the government because it tried to avoid a 50 basis point hike in a bond rate -- GM couldn't even issue them!).

GM is systemically, top-to-bottom, a broken firm. I really hope their re-org fixes this since almost most of my older relatives worked for them (everything from engineers to assembly line people). It's sort of like a broken marriage. Everyone needs to come to the table and admit it was partly their fault. However you get a bunch of overpaid execs, and crazy union bosses, and everyone is too macho to admit they screwed up.

Ford at least has the benefit of seeing the catastrophe early, canning the CEO, and trying to do what they could. Just narrowly avoiding disaster... And not on the public dime.

Chrysler has been in a bad situation ever since Daimler picked them up. It reminds me when Time Warner grabbed AOL. Somehow a company with a troubled future convinced another firm to buy them for a huge price.